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A Bad Credit Home Mortgage - Can You Get One?

By Edited Jun 4, 2015 0 0

Are you trying to purchase a home with less than perfect credit? It is time that you learned how to get a bad credit home mortgage so that you can live in your dream house. There is a lot of pride in owning your own home, and no matter if your credit is bad you can still find a home mortgage for people that, for many reasons, end up having bad credit. There are some steps that you will need to take in order to boost your chances of being approved for the loan that you need. If you know you have bad credit (and you do, otherwise why are you reading this article) you should start on these items at least 6 months before you plan to apply for a loan so that there is sufficient time to get yourself in the best position possible for getting approved.

The first step that you will want to take when finding a home mortgage with bad credit is to check through your credit report. There are a lot of places online where you can get a copy of your credit report. You are also entitled to a free copy of your credit report from each of the three main credit reporting agencies. You can get this free copy of your credit report once each year.

When you have obtained your reports be sure to go through them and check for any mistakes that may have been reported. If you find any mistakes you will want to write to the credit bureau that you got the report from detailing the mistakes as you see them and ask for them to correct the mistakes. The credit bureaus have a legal obligation to investigate any problems you report to them on their credit report within 30 days. If you find any mistakes and take care of them then you will be able to boost your credit score, remove any incorrect negative information and improve the chances of being approved for your loan by a mortgage lender specializing in loans for people with bad credit.
Another thing that you may notice on your credit report is debts that have an outstanding balance.

If you want to get a home mortgage with bad credit then you will want to try to pay off any outstanding debts that you have. In order to pay them off as quickly as possible you will want to make out a list and put down the debts that have the highest interest rates. These are the ones that you will want to pay off first. By paying these off first you will save yourself a lot of money. The longer that the interest piles up on an outstanding balance the harder it will be to pay the debt off because most of your money will be going to interest instead of the principal. Paying off these outstanding balances will greatly improve your chances of getting a home mortgage with less than perfect credit.

The next thing to look at closely is your budget. You want to buy a home, your credit stinks, and so getting a loan is more difficult than if your credit were pristine. Therefore you need to make the rest of your financial situation look as good as possible. You want to find out how much income you have compared to how many expenses you have. Lenders usually like to see that your mortgage payment will be less than 30% of your monthly income. If you have a lot of big expenses that you are obligated for then the percentage of income that you have left over may be lower than the percentage required by your lender. You need to get your monthly expenses down as low as possible. Pay off debt, cancel the expensive cable bill, and do what you can to save money. This will give you more cash flow and show discipline that will reflect positively when you go to apply for your loan.

In order to raise the chances of being approved for a home mortgage for bad credit you may want to consider picking up a second job. If you lower your expenses and raise your income it will look a lot better and the mortgage lender that you choose will feel more comfortable lending you the money that you need to purchase a home. If you have extra income you will be able to pay off some of the expenses that you have and save up money to put down on the home that you are interested in purchasing. This means that you will need to borrow less money and your chances of getting a home mortgage loan with bad credit will go up.

One thing that will help you to get the best bad credit home mortgage is comparison shopping. There are several companies that offer home loans for people with bad credit and they will show you how to get a home mortgage with bad credit. You will want to prepare a list of questions that you want the answers to. These questions will involve finding out what the interest rate is for borrowing the money that you need, finding out if there are any fees associated with borrowing the money, and you will want to find out what the terms of the loan are. You will want to shop around at a few different places to be able to compare their services before you decide which one you would like to go with.

Getting a bad credit home mortgage does not have to be a hard thing to do. Everyone makes mistakes with their credit, but there are lenders out there who will give you a chance to prove that you are responsible enough to own your own home. By checking your credit for mistakes and paying off any outstanding balances that you may have you will be able to increase your credit score and your chances of getting a loan. Be sure to check out a few different lenders that offer home mortgages for bad credit customers. These lenders will also offer bad credit home refinancing in case you ever need to refinance your home in the future. By following these steps you will be able to move into your dream house faster than you could ever imagine.



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